Strickland Company sells inventory to its parent, Carter Company, at a profit during 2017. Carter sells one-third of the inventory in 2017. 7) In the consolidation worksheet for 2017, which of the following accounts would be credited to defer unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers? A) Investment in Strickland Company. Sales. C)Retained earnings. Cost of goods sold. E) Inventory 7) oll dk Pepe, Incorporated acquired 60% of Devin Company on January 1, 2017. On that date Devin sold equipment to Pepe for $45,000. The equipment had a cost of $120,000 and accumulated depreciation of S66,000 with a remaining life of 9 years. Devin reported net income of $300,000 and $325,000 for 2017 and 2018, respectively. Pepe uses the equity method to account for its investment in Devin. 8) What is the gain or loss on equipment recognized by Devin on its internal accounting 8) records for 2017? A) $54,000 gain. B) $9,000 loss. C) $9,000 gain. D) $21,000 gain. Pol E) $21,000 loss. On January 1, 2017, Smeder Company, an 80 % owned subsidiary of Collins, Inc., transferred equipment with a 10-year life (six of which remain with no salvage value) to Collins in exchange for $84,000 cash. At the date of transfer, Smeder's records carried the equipment at a cost of S120,000 less accumulated depreciation of S48,000. Straight-line depreciation is used. Smeder reported net income of $28,000 and $32,000 for 2017 and 2018 respectively. All net income effects of the intra-entity transfer are attributed to the seller for consolidation purposes 9)What amount of gain should be reported by Smeder Company relating to the equipment for 2017 prior to making consolidating entries? A) $34,000 9) D) $O. E) $12,000. B) $36,000 C)s10,000. 10) What is the net effect on net income as a result of consolidating adjustments made in 2017 with respect to the equipment transfer? A) Decrease net income by $10,000. B) Increase net income by $2,000. C) Increase net income by $10,000 D) Decrease net income by $12,000. E) Decrease net income by $14,000. 10)